COVID-19 is ravaging advanced economies such as Italy, France, Spain and the United States. Beyond the deaths and human suffering, markets are discounting a catastrophic recession accompanied by massive defaults, as expressed in the radical repricing of corporate credit risk by financial markets.
As horrific as this sounds, the situation in advanced economies is likely to be much more benign than what developing countries are facing, not only in terms of the disease burden, but also in terms of the economic devastation they will face.
And while two academic communities—public-health experts and macroeconomists—are starting to talk to each other, unfortunately the conversation has mostly involved only the advanced countries.
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